Google, Viacom Settle YouTube Copyright Lawsuit

The two companies had been locked in a legal battle since 2007

Viacom and Google announced today that they have resolved a massive copyright case.

The closely-followed lawsuit was filed in New York federal court in 2007. It was alleged that YouTube had built its business by hosting without authorization tens of thousands of copyright-infringing videos, such as Comedy Central's "The Daily Show" and Nickelodeon's "SpongeBob SquarePants."

YouTube was then sold for $1.8 billion to Google, but Viacom continued to pursue the case and mostly focused on the video-sharing site's early days.

The core issue in the case was the "safe harbor" provision under the Digital Millennium Copyright Act. Upon notice from a copyright holder like Viacom, an ISP has a duty to respond expeditiously to takedown requests in the interest of escaping any liability for contributory infringement. The courts had to decide what qualified as requisite knowledge to compel an ISP to act. Viacom had asserted that there were "red flags" and that YouTube had willfully blinded itself to infringements on its system.

With billions of dollars in estimated damages, Viacom appealed the summary judgment ruling up to the 2nd Circuit Court of Appeals.

In April 2012, the 2nd Circuit agreed with much of Google's reasoning that it needed to be directed with "actual knowledge" to copyright infringements by a copyright holder but nevertheless revived the dispute, saying that there were still factual issues that needed to be addressed.

The 2nd Circuit judges noted estimates that 75 to 80 percent of all YouTube streams contained copyrighted material in its early days. According to the ruling, "These approximations suggest that the defendants were conscious that significant quantities of material on the YouTube website were infringing."

Back at a New York district court, Judge Stanton then gave Google a second summary judgment victory. Last April, the judge wrote, "The burden of showing that YouTube knew or was aware of the specific infringements of the works in suit cannot be shifted to YouTube to disprove."

Not satisfied, Viacom then appealed the verdict again up to the 2nd Circuit, where it was pending until today's announcement of a settlement.

According to a joint announcement by the companies, "Google and Viacom today jointly announced the resolution of the Viacom vs. YouTube copyright litigation. This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together."